The Reserve Bank of India’s special concessional foreign currency swap facility, launched in early June 2026 to attract deposits from overseas Indians, has mobilized $127.23 billion in Foreign Currency Non-Resident (Bank) deposits, known as FCNR(B). The initial expectation was somewhere in the range of $50B to $60B.
How the swap facility worked
The RBI rolled out the program between June 5 and June 8, offering to absorb the complete hedging costs for 3- to 5-year FCNR(B) deposits mobilized through authorized banks. The window was originally set to close on August 31, 2026, but the response was strong enough that the central bank wrapped things up ahead of schedule.
By covering hedging costs, the RBI essentially removed the currency risk that typically eats into returns on foreign currency deposits held in Indian banks. That freed up banks to offer tax-free interest rates in the range of 6% to 7.5%, and in some cases even higher.
For high-net-worth clients, some banks reportedly offered leverage capabilities reaching up to 9x against these deposits.
The deposits flowed in from NRIs based in the US, UK, Singapore, Hong Kong, and West Asia. Public sector banks reported robust participation, and platforms like GIFT City international banks played a meaningful role in outreach and onboarding.
Why the RBI did this, and why now
During the 2013 taper tantrum, the RBI ran a similar exercise that raised somewhere between $26B and $34B, which helped stabilize the rupee.
Rising oil prices had been putting pressure on India’s current account, and the rupee needed a buffer against external shocks. Finance Minister Nirmala Sitharaman added political weight to the effort in mid-July 2026, requesting that banks intensify their outreach toward NRIs.
The $127.23B haul pushed India’s foreign exchange reserves to approximately $729 billion, dwarfing the 2013 effort by roughly four times at the upper end of that earlier estimate.
What the record inflow signals
The estimated 35 to 37 million overseas Indians represent a financial force that central banks and finance ministries can mobilize with the right incentives.
The enhanced forex reserves create a thicker cushion against capital flight. A reserve position near $729B gives the RBI significantly more room to defend the rupee without burning through its war chest.
